UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2007

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission File Number: 0-23245

CAREER EDUCATION CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		36-3932190
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)
2895 Greenspoint Parkway, Suite 600,
Hoffman Estates, Illinois		60169
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (847) 781-3600

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large accelerated filer x

Accelerated filer o

Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o

Number of shares of registrant’s common stock, par value $0.01, outstanding as of August 6, 2007: 91,205,657

CAREER EDUCATION CORPORATION

INDEX

		Page
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Unaudited Condensed Consolidated Balance Sheets	3
	Unaudited Condensed Consolidated Statements of Income	4
	Unaudited Condensed Consolidated Statement of Stockholders’ Equity	5
	Unaudited Condensed Consolidated Statements of Cash Flows	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	73
Item 4.	Controls and Procedures	74
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	76
Item 1A.	Risk Factors	76
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	76
Item 4.	Submission of Matters to a Vote of Security Holders	77
Item 6.	Exhibits	77
SIGNATURES		78

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	June 30, 2007		December 31, 2006
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	99,161		$	187,853
Investments	264,095			259,766
Total cash and cash equivalents and investments	363,256			447,619
Receivables:
Students, net of allowance for doubtful accounts of $29,504 and $28,709 as of June 30, 2007, and December 31, 2006, respectively	45,030			48,564
Other, net	9,229			8,094
Prepaid expenses	39,207			29,621
Inventories	18,375			16,853
Deferred income tax assets	7,105			11,357
Assets held for sale	60,692			63,156
Other current assets	18,725			32,064
Total current assets	561,619			657,328
PROPERTY AND EQUIPMENT, net	341,954			352,270
GOODWILL	380,450			349,760
INTANGIBLE ASSETS, net	45,550			33,984
OTHER ASSETS	24,565			32,321
TOTAL ASSETS	$	1,354,138		$	1,425,663
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt	$	11,311		$	12,098
Accounts payable	26,665			30,095
Accrued expenses:
Payroll and related benefits	26,636			27,012
Income taxes	4,586			—
Other	87,742			78,885
Deferred tuition revenue	114,598			132,186
Liabilities held for sale	31,246			31,879
Total current liabilities	302,784			312,155
LONG-TERM LIABILITIES:
Long-term debt, net of current maturities	3,304			2,763
Deferred rent obligations	91,660			90,360
Deferred income tax liabilities	16,328			16,527
Other	8,413			7,980
Total long-term liabilities	119,705			117,630
SHARE-BASED AWARDS SUBJECT TO REDEMPTION	13,827			13,477
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued or outstanding	—			—
Common stock, $0.01 par value; 300,000,000 shares authorized; 107,562,174 and 106,923,310 shares issued, 92,827,210 and 96,148,825 shares outstanding as of June 30, 2007, and December 31, 2006, respectively	1,076			1,069
Additional paid-in capital	688,554			666,780
Accumulated other comprehensive income	9,431			5,683
Retained earnings	710,001			675,188
Cost of 14,734,964 and 10,774,485 shares in treasury as of June 30, 2007, and December 31, 2006, respectively